Builder confidence for new single-family homes dropped one point to 16 in December, according to the National Association of Home Builders/Wells Fargo Housing Index.

“From an affordability standpoint, rarely has there been a better time in history to purchase a home, thanks to record low interest rates, attractive prices, and of course the recent extension and expansion of the home buyer tax credit,” said Joe Robson, chairman of the NAHB and a home builder from Tulsa, Okla. “However, builders are not seeing the full impact of these conditions on buyer demand, partly because awareness of the latest incentives is still building, and partly because of concerns about job security and other economic woes.”

David Crowe, chief economist for the NAHB, said that the slight dip in December does not come as a surprise.

“As we anticipated, this is shaping up to be a bumpy recovery period for the housing market,” he said. “While some families may be just starting to factor the expanded tax credit into their potential home-buying plans, many are hesitating because of the poor economy. At the same time, tight lending conditions for both consumers and home builders continue to pose considerable obstacles on the road to a sustained housing and economic recovery.”

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

The December HMI fell one point to 16, its lowest point since June 2009. Two out of three component indexes also were down, with a one-point decline to 16 registered for current sales conditions and a two-point decline to 26 registered for sales expectations in the next six months. The component gauging traffic of prospective buyers remained unchanged at 13 for a third consecutive month.

Regionally, December’s HMI results were mixed. The Northeast posted a three point gain to 23, while the West posted a one-point gain to 19, the South registered no change at 17, and the Midwest posted a two-point decline, to 12.